Chapter XXVII: Genesis of the Industrial Capitalist

Primitive accumulation is accomplished by force. —The colonial regime, public
debts and the protectionist system.

Primitive Accumulation Is Accomplished By Force.

There is no doubt that many guild-masters, independent artisans and even wage-laborers
first became embryonic capitalists, and then gradually, by means of a constantly
expanding exploitation of wage-labor accompanied by a corresponding accumulation,
metamorphosed themselves into fully developed capitalists.

Yet, this gradual formation of capital was far from meeting the commercial requirements
of the new world-market created by the great discoveries of the end of the fifteenth
century. But the middle ages had handed down two forms of capital which develop
under the most diverse economic regimes, and which, before the modern era, were
the only forms of capital. These are usurer's capital and merchant's capital.
Now, the feudal system in the country and the guild organization in the towns were
barriers which prevented the money-capital, formed by usury and commerce, from turning
into industrial capital, but these barriers were at last overthrown.

The discovery of gold and silver mines in America, the entombment in the mines of
the enslaved natives or their extermination, the beginning of the conquest and pillage
of the East Indies, the conversion of Africa into a hunting-ground for the kidnapping
of negroes—these were the benevolent processes of primitive accumulation which
signalized the rosy dawn of the capitalist era. Immediately afterward the mercantile
war broke out with the entire globe for its theatre. Beginning with the revolt of
the Netherlands against Spain, it assumes gigantic proportions in the crusade of
England against the French Revolution and in our own times is still going on in
a series of piratical onslaughts such as the notorious opium wars against China
and the "benevolent assimilation" of the Philippine Islands by the United States.

Of the different methods of primitive accumulation, such as the colonial system,
public debts, modern fiscal methods, the protectionist system, etc., some are based
on the employment of brute force; but all, without exception, make use of the powers
of the State—the concentrated and organized force of society—in order
to violently accelerate the passage from the feudal economic order to the capitalist
economic order, and to curtail the transition period. In fact, force is the midwife
of every old society in the throes of child-birth. Force is an economic agency.

The Colonial Regime, Public Debts and the Protectionist System.

The colonial system developed navigation and commerce. It called into existence
mercantile companies to which governments granted monopolies and privileges, and
these companies became powerful instrumentalities
for the concentration of capital. It secured markets for the nascent manufactures,
and the monopoly of the colonial market doubled the ease of accumulation in manufacture.
The treasures extorted by plain force, outside Europe, by the forced labor of aborigines
reduced to slavery, by pillage and murder, were brought back to the mother country,
to function there as capital. In our days, industrial supremacy implies commercial
supremacy; but, in the manufacturing period, properly so-called, it is commercial
supremacy which gives industrial supremacy. This explains why the colonial regime
played such an important part in those days.

The system of public debts, which Venice and Genoa began to introduce in the middle
ages, came into general use throughout Europe during the period of manufacture.
National debt—in other words, the sale or hypothecation of the State, whether
it be despotic, constitutional or republican—placed its stamp upon the capitalist
era. The only part of the so-called national wealth, that is actually in the collective
possession of modern peoples, is their national debt.

The public debt acts as one of the most powerful instruments of primitive accumulation.
By a stroke of its magic wand, it endows barren money with reproductive powers,
and thus transforms it into capital—expanding capital, but free from the risks
inseparable from its employment as industrial capital or even as the capital of
a money-loaner dealing with individuals.

Those who loan to the State, in truth, give up nothing, for their principal, transformed
into easily negotiable
public securities, continues to function in their hands like so much legal-tender
money. But, besides the class of idle bondholders thus created, besides the suddenly
arisen fortunes of the financiers who act as middlemen between the government and
the nation, the public debt has given rise to stock companies, to commerce in negotiable
paper of every kind, to gambling operations, to stock-broking—in a word, to
the speculation of Lombard Street and Wall Street, and to the supremacy of the modern
Money Power.

At their birth, the great banks, adorned with sonorous national titles, were merely
associations of private speculators who established themselves alongside of the
respective governments and, thanks to the privileges they secured from them, were
able to lend them the money of the public—i.e., the money of their
depositors.

As the national debt rests upon the public revenue, from which the annual interest
must be paid, the modern system of taxation was the necessary consequence of national
loans. These loans, which enable governments to meet extraordinary expenses, without
making the taxpayer immediately conscious of the added burden, lead afterward to
a rise in the tax-rate. On the other hand, the raising of taxes caused by the accumulation
of debts successively contracted, compels governments, in the event of new extraordinary
expenditures, to resort to new loans. The modern fiscal system which rests, in the
beginning, on the taxation of articles of primary necessity, and involves, consequently,
the raising of their prices, must in virtue of the nature of its own mechanism,
therefore, become more and more oppressive. Over-taxation
is not an incident, but is of the essence of the system, and it constantly tends
to expropriate the peasants, the artisans, and the other elements of the lower middle-class.

The great part, which the public debt, and the correspondent fiscal system, have
played in the capitalization of wealth and the expropriation of the masses, has
led many writers to fall into the mistake of seeking to find in this debt system
the fundamental cause of the misery of modern peoples.

The protectionist system, with its protective duties, its bounties on exportation,
its monopolies in the home market, etc., was an artificial means of manufacturing*
manufacturers, of expropriating independent laborers, of transforming the instruments
and material conditions of labor into capital, and of forcibly curtailing the period
of transition from the mediaeval to the modern mode of production. The process of
manufacturing manufacturers was still further simplified in certain countries which
had profited by Colbert's object-lessons. Here, the enchanted source from which
the industrial exploiters directly drew their primitive capital—under the
form of a loan or even of a gratuitous grant—was often the public treasury.

The colonial system, public debts, squandering of the
public revenue, industrial protection, commercial wars, etc., developed tremendously
during the infancy of modern industry.

In short, that is how the divorce of the laborer from the means of realizing his
labor was accomplished, that is how the latter were transformed into capital and
the mass of the people into wage-laborers. Capital comes into the world sweating
blood and dirt from every pore.

Notes

* Translator's Note. Heretofore in this work the word manufacture, and its
derivatives, have been used in the strict sense of manufacture before the introduction
of modern machinery. Here, they are used in their popular meaning.